The results shown should not be considered as a representation of the performance of the Index in the future, nor should the results be considered as a representation of the performance of NASDAQ-100 Index Tracking Stock or the NASDAQ 100-Trust. Investment returns and principal value for NASDAQ-100 Index Tracking Stock will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Fees and expenses will reduce the performance of the NASDAQ-100 Index Tracking Stock as compared to the performance of the NASDAQ-100 Index.

An investment in NASDAQ-100 Index Tracking Stock should be made with an understanding that the NASDAQ-100 Trust will not be able to replicate exactly the performance of the Index because the total return generated by the securities held in the Trust will be reduced by transaction costs incurred in adjusting the actual balance of the securities and other Trust expenses, whereas such transaction costs and expenses are not included in the calculation of the Index. It is also possible that for short periods of time, the Trust may not fully replicate the performance of the Index due to the temporary unavailability of certain Index securities in the secondary market or due to other extraordinary circumstances. Such events are unlikely to continue for an extended period of time because the trustee of the Trust is required to correct such imbalances by means of adjusting the composition of the Trust. It is also possible that the composition of the Trust may not exactly replicate the composition of the Index if the Trust has to adjust its portfolio holdings in order to continue to qualify as a "regulated investment company" under the Internal Revenue Code. As a result, while the investment objective of the Trust is to provide investment results that generally correspond to the price and yield performance of the Index, there is no assurance that this investment objective can be fully achieved.

Launched in January 1985, the NASDAQ-100 Index represents the largest non-financial domestic and international issues listed on The NASDAQ Stock Market based on market capitalization. The NASDAQ-100 Index is calculated under a modified capitalization-weighted methodology. The methodology is expected to retain in general the economic attributes of capitalization-weighting while providing enhanced diversification. To accomplish this, NASDAQ will review the composition of the NASDAQ-100 Index on a quarterly basis and adjust the weightings of Index components using a proprietary algorithm, if certain pre-established weight distribution requirements are not met.

Initial Eligibility Criteria

To be eligible for initial inclusion in the NASDAQ-100 Index, a security must be listed on The NASDAQ Stock Market and meet the following criteria:

• the security must be listed on the NASDAQ National Market;
• the security must be of a non-financial company;
• the security may not be issued by an issuer currently in bankruptcy proceedings;
• the security must have average daily trading volume on NASDAQ of at least 200,000 shares;
• if the security is of a foreign issuer¹, it must have listed options or be eligible for listed-options trading;
• the issuer of the security may not have entered into a definitive agreement or other arrangement which would result in the security no longer being listed on NASDAQ within the next six months;
• the issuer of the security may not have annual financial statements with an audit opinion which the auditor or the company have indicated cannot be currently relied upon;
• the security must have "seasoned" on NASDAQ or another recognized market (generally, a company is considered to be seasoned if it has been listed on a market for at least two years; in the case of spin-offs, the operating history of the spin-off will be considered); and
• if the security would otherwise qualify to be in the top 25 percent of the securities included in the Index by market capitalization for the six prior consecutive month ends, then a one-year "seasoning" criteria would apply.